Heuristics in Analytics: A Practical Perspective of What Influences Our Analytical World

Chapter 2

Unplanned Events, Heuristics, and the Randomness in Our World

One of the features of the heuristic method is to deal with unexpected scenarios or random events. When business scenarios change—and they do quite often—analytical models need to adjust to the new boundaries and constraints. The heuristic method of problem solving addresses this by providing a framework to test distinct solutions that can be examined in accordance with the range of possible solutions.

Unplanned events are often described as randomness in modeling and encapsulate how business situations can change unexpectedly, altering perspectives about the marketplace and the pattern of behavior assigned to consumers, products, and services. This chapter introduces overall concepts associated with seemingly arbitrary processes, including mathematical approaches to handling random events.

The basis for these notions is that everything is connected. Changes in one aspect of the system can lead to other changes, sometimes even very small initial changes. Popularly known as the butterfly effect, slight alterations in inputs, conditions, and events can impact analytical model development, as will be described in this chapter. Random walks are another phenomena used to describe the unsystematic processes operating in real world environments. And lastly, the drunkard’s walk, a particular case of random walks, is described. All of these different effects illustrate that while we can neither control nor predict everything, ...